Customer acquisition and retention is more important than ever in eCommerce. Consumers are spoilt for choice by the wide range of webshops and marketplaces available in online retail. Within just a few clicks, consumers can leave an online shop and switch to a more interesting seller with even more lucrative offers. This means that customer acquisition in online retail is not an easy task and presents retailers with major challenges. So be aware that only those retailers who have the right pricing, as well as convincing offerings and services will succeed.
In today’s article, we ask ourselves the following questions: How do online retailers accurately target the customers of today and tomorrow? How do they bond customers to their company? Are social networks relevant in this context? And what role do service offerings play? For this purpose, we take a close look at the current short study conducted by ECC Cologne and Hermes and offer you fitting tips for a flawless online presence.
Where do your customers get their information before buying?
Through price comparisons, retailer ratings and service offerings! Before making a purchasing decision, consumers can easily obtain information over the Internet. On average, 1.9 different sources of information are used for the online search before finally deciding upon an offer. Online shops and marketplaces play the largest roles here (70.2 percent). After search engines, they are the second most common source of information before a purchase. Overall, marketplaces account for almost 30 percent of German online sales. As expected, the most popular online marketplace is the giant Amazon with its Marketplace (21.1 %), followed by eBay (6.6 %).
# Tip: An investment in good search engine optimisation (SEO) makes a lot of sense in guiding potential customers to your own online shop.
# Tip: Online marketplaces are relevant sales channels and should not be completely ignored by retailers. Consider carefully, however, whether a presence of your products on such platforms will be worthwhile.
Customers strive for online relationships
In the context of purchasing decisions, it is becoming increasingly important for consumers to establish so-called online relationships – as an article in the Journal of Marketing makes quite clear. Due to a certain anonymity of online providers and the huge selection of retailers in eCommerce, some risks arise for consumers, such as the trustworthiness and reliability of those providers. At first glance, they cannot judge whether the retailer may be serious or just a fraudster. Consumers, therefore, can make better decisions in eCommerce if they build up a bond with the seller – but also with other buyers. Consumers are looking for three key factors to build this relationship:
- They value exchange of information with the seller – whether it be questions about the products or delivery conditions – the consumer always wants to interact with the retailer.
- The reputation of the seller is also essential to a purchasing decision and the establishment of an online relationship. Only if the seller has a good reputation does a consumer wish to make contact with them. Poor ratings signal dissatisfaction and are not conducive to building up a relationship.
- Ultimately, however, it is also the buyer’s own observations that contribute to establishing a relationship in eCommerce. Consumers inform themselves by all means available and naturally search high and low: Where do other consumers buy? Which channels do they use?
As you can see, building an online community is becoming increasingly important. The online platform Polyvore has recognised this and offers an exchange between customers and providers, as well as between just customers themselves. Interested parties can follow retailers and even other buyers whose tastes and prices they admire. Retailers, on the other hand, can backtrack to customers and bond them on through targeted addresses within the community. Even at online flea markets such as Kleiderkreisel and Mamikreisel, the community is very pronounced – especially in the forum section.
# Tip: Building relationships with customers is of enormous importance for customer retention – an online community is the ideal tool for convincing customers to buy.
The big importance of Facebook, Instagram and others in addressing customers
“The more the better” is a motto by no means taken literally when addressing customers through social media. Of course, it is important to convince potential customers of your own products, but a flood of information offers no added value to consumers and ultimately also to you. Instead, you should concentrate on the channels that consumers use intensively.
According to a short study by ECC Cologne and Hermes, Facebook, despite declining user numbers in Europe, is the most frequently used channel. A full 44 percent of respondents use the network at least once a day. YouTube, the second most popular social medium, is visited daily by only 17 percent of respondents. Other relevant channels include blogs, Instagram and Twitter.
# Tip: Think carefully about which channels you will use for your social media presence. Potential customers can only be guided towards your shop if you are actually noticed on these channels. The development of a social media plan is essential here. Especially tempting, as an example, are lotteries and discounted offerings.
Shipping and delivery terms decide upon customer purchase
Shipping and delivery terms are among the important success factors in eCommerce and thus contribute to customer acquisition and retention. Even if shipping services prove decisive to the initial purchase, the retailer should still care a lot about retaining customers even after that first order has been fulfilled.
For around 27 percent of customers, parcel notification is a decisive criterion for purchase. Express delivery and the indication of a specific delivery location are important to 14 percent of consumers. Furthermore, real-time tracking, time window delivery and same-day delivery should not be disregarded, since consumer demand for these is currently on the increase.
# Tip: Offer your customers various delivery-related services. A variety of services here will differentiate you from other shops and customers will then be more willing to order from you.
The right pricing also determines whether to buy or not
Of course, the price, as well as the assortment offered, is also of decisive importance to whether the consumer makes a purchase or not. For online retailers, an orientation towards the price and assortment management of comparable retailers becomes worthwhile. This mammoth task, however, can hardly be accomplished manually alongside the usual day-to-day business. To relieve online retailers from this workload as much as possible, our innovative solution blackbee supports competitor analysis in eCommerce by collecting and processing information on both prices and product lines. Using this collected data, online retailers can achieve a precise overview of the market and see how competitive their prices really are. Price changes and product overlaps with competitors become immediately recognisable and retailers can then react to these at lightning speed. Using this information, the implementation of an optimal pricing strategy suddenly turns into mere child’s play.
# Tip: With competitor analysis tools, you can keep a close eye on your competition and witness how their prices and product ranges shift. Let the appropriate tools help you to remain always one step ahead of your competitors.
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